Ether (ETH) is up more than 3.5% this week, but is still on track to form a so-called death cross. According to charting platform TradingView, the cryptocurrency’s 50-day simple moving average is on pace to move below its 200-day moving average. This death cross is widely considered a long-term bearish indicator, but past numbers suggest otherwise. Since its inception, ether has seen six death crosses, of which only three lived up to the reputation. “In other words, a trader holding a short for 12 months following the occurrence of these death cross would have made handsome returns,” noted the report. On the contrary, a trader holding a short position for 12 months following the first, third and fourth death cross would have missed out on triple-digit price rallies.
Most death crosses turned out to be contrary indicators, with prices rallying and averages following suit to produce a golden cross within three to six months of the preceding death cross. This indicates that the death cross is unreliable as a standalone indicator. Despite this, the impending death cross is consistent with the bearish outlook in the ether options market and lingering concerns about the slowdown in Ethereum’s network usage. At press time, ether was trading at $1,710.